Apple has agreed to pay $490 million to settle a class-action lawsuit alleging CEO Tim Cook misled investors about a steep downturn in iPhone sales in China. The preliminary settlement, filed in Oakland, California, federal court, stems from a shareholder lawsuit focused on how Apple relayed information about the performance of iPhone models released in September 2018 in China, one of the company's biggest markets.

During an investor conference call in early November 2018, Cook reassured investors that the new iPhones were off to a good start. However, on January 2, 2019, Cook issued a warning that Apple's revenue for the just-completed quarter would fall $9 billion below management's forecast, with weak demand in China being the main cause. This marked the first time Apple had cut its revenue guidance since the iPhone's release in 2007, causing its stock price to plunge 10% in the next day of trading, wiping out over $70 billion in shareholder wealth.

Apple vehemently denied deceiving investors about iPhone sales in China, but decided to settle the lawsuit after more than four years of legal wrangling to avoid further hassle. The settlement, reached through a mediator, will be subject to approval by U.S. District Judge Yvonne Gonzalez Rogers in a hearing scheduled for April 30. Thousands of shareholders who bought Apple stock in late 2018 could be eligible for a share of the settlement, which will be distributed from a pool less than $490 million after lawyers' fees.

The $490 million payment represents less than 1% of the $97 billion profit Apple made in its last fiscal year. Despite this settlement, Apple shareholders who held onto their shares have seen significant gains, with the stock price more than quadrupling since Cook's China warning, creating an additional $2 trillion in shareholder wealth.